'Change rules of game to survive'

By Our Special Correspondent

CHENNAI, JAN. 28. Conformity with the best practices and global benchmarking - the `mantras' that have been dinned into the ears of corporate executives in India for the past few years - are exactly what should not be resorted to when it comes to businesses evolving a strategy for the future, said Dr. Vijay Govindarajan, keynote speaker at the opening session of Cost Congress-2000 here today.

Dr. Govindarajan, Professor of International Business at the Amos Tuck School of Business Administration, Dartmouth College, warned that in the next decades, discontinuities in technology and business models will arise much faster than in the past century and hence companies that stuck to projecting the present would simply perish.

While tools like cost management, BPR (business process reengineering) and restructuring which took care of the existing `performance gap' in industry sectors (or Managing The Present) needed to be pursued, an equal share of the ``intellectual horse power'' and resources of companies should be spent on managing the ``opportunity gap'' that will decide their future as a result of entirely new technologies and business models that will emerge.

To tap the opportunity gap, companies would have to ``selectively forget the past'' (refrain from applying these traditional tools) and concentrate on writing new rules of the game where they will be the pioneers and not imitators.

The strategy of writing of new rules had of course had been adopted successfully in the past too - like Canon making the photocopying machine a retailed product rather than one targeted at corporates and thus ending the monopoly of Xerox Corp and breaking entry barriers by making small machines and taking to cash sales instead of leasing. The future of Sony was being threatened by the merger of telecommunication and computers, of Kodak by the ongoing digitalisation by Fuji. Motorola and Federal Express were instances of new businesses upsetting the existing rules of the game.

If only nine out of the U.S. Fortune 500 in the year 1900 survived in the 500 list of the year 2000, this trend will only accelerate and create more dinosaurs. Hence, instead of imitating MNCs' best practices for purposes of planning for the future (though the best practices were still relevant for dealing with current performance), companies should develop ``strategic intent'' that were dramatic and inspiring, like the moon landing goal set by President John F. Kennedy. Such strategic intents, Dr. Govindarajan emphasised, would not be forthcoming unless creativity and empowerment reached all levels of the organisation.

``Do to strategy what we did to quality two decades ago thanks to Deming - make it everybody's concern and motivation'', he advised.

Other presentations on the opening day of the Cost Congress, the third such biennial event organised by the Confederation of Indian Industry-Southern Region (CII-SR), focussed on cost management in the current scenario but again one common thread running through them was the need to bank on employees to create awareness about new realities and new cultures and practices. One of the speakers called it a new BPR - `badlo puraane raasthe' (change old ways).

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